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French Election Could Destroy the EU

Sunday’s presidential vote in France will be an election for the ages. euroskeptic extremists on the left and the right are both polling surprisingly well, and hope to draw enough voters from a fractured center to put them over the top.

Centrist candidates are putting forth populist or anti-immigrant plans, hoping in turn to woo enough voters away from the far-left or far-right to make the May 3 run-off.

This election has repercussions far beyond the borders of France. The fate of the European Union and the stability of Western Europe hang in the balance.

For the first time in modern history, the incumbent president of France will not stand for re-election. The popularity of French president Francois Hollande is so low, he bowed out of the race to allow his Socialist Party to nominate another candidate.

The Candidates

There are 11 total candidates vying for the French presidency, but only five have a realistic chance of winning.

EMMANUEL MACRON (Independent)

The former Economy Minister in Hollande’s administration, Macron was forced out of office by the Socialists for espousing centrist policy ideas. As a result, he formed the “En March” (On The Move) centrist political party.

Socially liberal, he is an economic reformist who wants to revise leftist labor laws that are suffocating businesses and enact corporate tax cuts. Called “Brussels’ Sweetheart,” he is the favorite candidate of the EU establishment and the French business sector.

He has never held an elected office, and if victorious, would be France’s youngest president.

MARINE LE PEN (National Front)

Leader of the far-right Front National, Le Pen is the daughter of party founder Jean-Marie Le Pen. She has worked to reduce the party’s reputation for anti-Semitism since taking control from her father in 2011. Once considered a fringe party, FN is now among the most powerful political forces in France.

Le Pen has campaigned on a similar platform as the euroskeptic UK Independence Party. She has called for a renegotiation of several EU treaties, including the “open borders” Schengen Agreement, and a return to the French franc. Failing an accord with the EU government, she has called for a national referendum on leaving the European Union—a “Frexit.”

FRANCOIS FILLON (Les Republicans)

The candidate of France’s mainstream conservative party, Francois Fillon was the hands-down favorite to be the next President after defeating former president Nicolas Sarkozy for the party’s nomination. That is, until he was caught up in a corruption scandal in January that resulted in a criminal investigation. His campaign went into a tailspin, and he was written off by most political observers. However, he has managed to make a late surge in the polls, winning back voters who had moved into the Macron and Le Pen camps. This puts him back into contention for one of the two spots in the next round of voting.

A “law and order” candidate, Fillon has promised to beef up police and security forces, implement immigration quotas, strip French supporters of Daesh of their citizenship and lower the age to be tried as an adult in court to 16 years. He is supported by the Christian Right and “family values” voters for his anti-abortion and anti-gay rights stances. Unlike mainstream EU politicians, Fillon is pro-Russia and pro-Assad. Pro-business and pro-deregulation, he aims to slash government payrolls as well as public assistance. He favors raising the legal cap on the French 35-hour workweek to 40 hours, and cutting corporate taxes.

He has moved further to the right in recent weeks, trying to lure away supporters of Le Pen by taking a harder line against Muslim immigrants. This may cost him some of his more moderate voters.

JEAN-LUC MELENCHON (France Insoumise “France Unbowed”)

A life-long socialist, Jean-Luc Melenchon decided in 2008 that the Socialist Party wasn’t far enough to the left, and started his own party, France Unbowed. Much like Fillon, he had been written off as an also-ran for the last several months. Also like Fillon, has has experienced a huge surge in support in the last couple of weeks. In a third point, both Fillon and Malenchon are pro-Russia. Both are also polling at 19% in the latest aggregate polling numbers, tied for third place.

A extreme-left populist “before it was cool,” Melenchon taps into the same anti-EU, anti-austerity, anti-establishment current among young voters that saw Syriza, Five-Star, and Podemos rise in power elsewhere on the continent. Melenchon is a fan of the late dictator Hugo Chavez of Venezuela, and carries that same anti-elites worldview.

He wants to re-write the French Constitution to form a Sixth Republic, stripping some powers of the presidency and giving them to Parliament. He also wants to reduce the legal cap on the workweek from 35 hours to 32, confiscate individual earnings over €400,000, embark on a massive social spending campaign to increase job retraining, reduce poverty, and abolish homelessness. This would put him against EU mandates on deficit spending caps, but he is more than ready to call for a “Frexit” to implement his policies.

His sudden surge and campaign platform has French capitalists more than worried. The worst nightmare for the French economy would be a runoff between the extreme-right Marine Le Pen, and extreme-left Melenchon for the presidency.

BENOIT HAMON (Socialists)

Finally, we have the Socialists. The party had to find a new candidate with current president Hollande refused to run for reelection. In what is considered a moderately left campaign in France (but unbelievably leftist to Americans), ex-Education Minister Benoit Hamon seeks to expand on the policies of the present administration.

Some signature platform planks are reducing the workweek to 32 hours, making it even harder to fire workers, implementing a minimum income, taxing robots that take human jobs, and legalizing pot. This is not leftist enough from many French socialists, who have flocked to Melenchon.

Common Ground

Frexit goes mainstream

The success of last year’s Brexit referendum in the UK has the proud French determined to cut a new deal of their own with the EU establishment. As a result, presidential candidates across the French political spectrum are threatening a Frexit referendum, but for widely divergent reasons.

The only hope for the centrist candidates and the status quo is a huge surge in turnout aimed at preventing either extremist from winning the first round, a la the Dutch voters and Geert Wilders. Warnings from economists that either Le Pen or Melenchon advancing to the next round would crush the euro below parity to the dollar may help sway voters to support one of the other three candidates.

Blood Boosting Le Pen?

The tragic gun attack on two French policemen at the Champs d’Elysses yesterday is certain to play to the public’s fear of Islamist terrorism. The gunman, who was shot dead at the scene, was apparently going to attack random police stations after shooting the two policemen, killing one and wounding the other. He had previously served 12 years in prison for shooting at police officers.

Marine Le Pen immediately called for every fundamentalist mosque in France to be closed down, and anyone on any terrorist watch list to be deported at once, actions which earned her swift accusations of plotting to use the policeman’s death to gain last-minute support for her anti-Muslim crusade.

Today was the last day of campaigning, by law. Candidates are not allowed to make public statements, nor media release any more polls, until after Sunday’s votes are cast. With 28% of voters in the latest poll saying that they were either undecided or were abstaining, there are plenty of votes up for grabs to propel any of the five candidates to victory.

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.